ASML Surges, TSM Rising: Street Sees Chip Hope in Q4 Results

By Tiernan Ray

Shares of contract chip manufacturer Taiwan Semiconductor Manufacturing (TSM) and chip equipment vendor ASML Holding N.V. (ASML) are on the rise after both companies reported Q4 results in line with consensus, and TSM forecast Q1 revenue to top analysts’ expectations.

Taiwan Semi shares are up 44 cents, or 2.5%, at $18.24, while ASML shares are up $5.50, or 8.6%, at $69.32.

TSM reported $131.3 billion in New Taiwan dollars’ worth of revenue in the three months ending in December, or $4.52 billion U.S., up 25.4%, year over year, and 28 cents in net incomer per American Depository Receipt. Analysts had been expecting $4.49 billion and 26 cents.

The company forecast Q1 revenue of $127 billion to $129 billion in New Taiwan dollars. In U.S. dollar terms, at current exchange rates, that is $4.38 billion to $4.6 billion, topping the consensus $4.26 billion for this quarter.

During a conference call with analysts this morning, TSM’s chief financial officer, Lora Ho, said demand proved strong than the company had been expecting at the start of the quarter.

Ho said it was all about mobile phones in the quarter: “However, demand for mobile computing devices remained firm, making communication the only growing segment in the fourth quarter, while demand for computer, consumer and industrial-related product all declined by double digits.”

ASML reported Q4 revenue of €1.02 billion, down roughly 14%, year over year, and EPS of €0.66, excluding some costs, compared to the average €1.03 billion and 43 Euro cents.

For the current quarter, ASML projected revenue of €850 million, below the average $1.1 billion revenue estimate. The year outlook for €4.7 billion is also below the average €5.3 billion estimate.

ASML also raised its annual dividend by 15%, to €0.53 per share, or 19.6% of 2012′s earnings.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.